Butter is a dairy product made from the cream of cow's milk. Margarine is a butter substitute made from hydrogenated vegetable oil. Don't let anyone fool you- margarine is not a health food. Margarine also contains trans-fat.
Here is an article from the Cleveland Clinic that discusses some of the pros and cons of butter and margarine.
If you look at a package of butter the ingredients are usually milk, cream, salt (maybe beta carotene for coloring). If you look at a margarine package you are going to see a whole list of oils, emulsifiers, additives, preservatives, and things you can't pronounce. Many types of margarine are now labelled "0 trans-fat". This is not true because all hydrogenated oils (corn oil, soy oil) contain trans-fat. Butter is also available in an organic version. Here's another article about butter vs. margarine.
My bottom line is butter is better, in moderation. If you have a significant cholesterol problem you may want to limit the amount of butter you consume.
By the way- did you know that butter is sold in sticks in the East part of the U.S. and blocks in the West?